“Lost Taxes and Other Costs of Marijuana Laws”

“Based on a retail price of $7.87 a gram, a pound of marijuana is worth $3,570 and the commodity is worth $7,871,480 per metric ton. At this price the annual supply of 14,349 mt of marijuana available in the United States is worth $112.9 billion. The diversion of money spent on marijuana has a considerable impact on the fiscal budgets of all levels of government in the United States, especially through the diversion of this amount of money from the licit and taxed sectors of our economy to the illicit, untaxed, and unregulated illegal economy that thrives on these considerable expenditures.

Allowing for 15% federal income tax, 15% social security tax (combining individual and employer shares), and estimating a state income tax rate of 4.7%, this results in a loss of $6.8 billion in taxes for state and the federal government. Assuming an estimated sales tax of 5.4%, the result is a loss of $6.1 billion in tax revenue for state governments.
Assuming an effective corporate tax rate of 2.6% of gross revenue, the result is a loss of $2.9 billion in tax revenue. This minimal model produces a total loss of tax revenue of close to $15.9 billion.”